Boston, MA -- (ReleaseWire) -- 01/27/2014 -- BMI View: The UK government's implementation of an almost 4% price cut on medicines in 2014, under a five-year agreement to slow inflation in the GBP11bn (US$15bn) annual National Health Service (NHS) medicines budget, will work against the country's business environment. The continuation of the Pharmaceutical Price Regulation Scheme (PPRS), which should have been replaced by the value-based pricing (VBP) at the start of 2014, highlights the government's view that medicines are a cost that need to, and will be, managed - despite the negative implications this is already having on the country's investment attractiveness. Additionally, the details of the new pricing scheme remain unknown to industry, further increasing the uncertainty.
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Headline Expenditure Projections
Pharmaceuticals: GBP23.30bn (US$37.15bn) in 2012 to GBP22.93bn (US$34.86bn) in 2013; -1.6% in local currency terms and -6.2% in US dollar terms. Forecasts broadly unchanged in relation to the previous quarter.
Healthcare: GBP144.42bn (US$230.24bn) in 2012 to GBP147.45bn (US$224.12bn) in 2013; +2.1% in local currency terms and -2.7% in US dollar terms. Forecasts unchanged in relation to the previous quarter.
Risk/Reward Rating: The UK has lost its pole position in our latest Pharmaceutical Risk/Reward Rating (RRR) matrix, now ranking only fifth out of the 14 markets profiled in the Western Europe region. While its developed healthcare system and the predicable operating environment support its attractiveness from the point of view of research-based manufacturers, the downward pressure on prices and a general climate of cost-containment in relation to pharmaceutical spending will continue to weigh down on its longer-term market opportunities. Nevertheless, we are still broadly optimistic that the UK's pharmaceutical market will remain one of the most attractive globally.
Key Trends And Developments
- In October 2013, UK Prime Minister David Cameron unveiled plans to offer extended general practitioner (GP) opening hours across England, making it easier for people to see their family doctors. The decision comes on the back of an National Health Service (NHS) survey, which revealed that almost one in five patients were concerned by inconvenient appointment times. Pilot projects are to be carried out in nine areas in England, covering up to half a million patients, with the first wave to be open during 2014/15. The project will incorporate communication technology with a view to modernise healthcare delivery and thus reduce pressure on stretched accident and emergency departments.
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